China Auto Logistics Inc., incorporated on February 22, 2005, is engaged in providing automobile sales and trading service and a Web-based automobile sales and trading information platform to the Company's customers. The Company, through its subsidiaries provides customs clearance, storage, nationwide delivery services, provision of information and discounted services relating to automobiles (automobile value added services) to imported automobile distributors and agents, as well as individual customers in China. The Company is a one-stop service provider in Tianjin for Financing Services and Automobile Value Added Services. The Company has five principal operating segments: sales of automobiles, financing services, web-based advertising, automobile value added services and airport auto mall automotive services. The Company ceased providing auto mall management services due to the expiration on February 28, 2014 of the Cooperation Agreement dated March 1, 2013, by and between the Company and Tianjin Prominent Hero International Logistics Co., Ltd, to manage the International Auto Mall in Tianjin, China. The Company’s subsidiaries include: Tianjin Binhai Shisheng Trading Group Co., Ltd., Tianjin Zhonghe Auto Sales Service Co., Ltd., Tianjin Hengjia Port Logistics Corp., Tianjin Ganghui Information Technology Corp. and Tianjin Zhengji International Trading Corp.

Sale of Automobiles

The Company conducts its sales operations of imported automobiles primarily through Shisheng, Hengjia, Zhengji and Zhonghe. The Company is a general agent and wholesaler authorized by the Chinese government to import vehicles into the People Republic of China. The Company also works with automobile dealers in the overseas market. The Company sells its vehicles to authorized dealers like Ford or Lexus.

Financing Services

The Company's Financing services include letter of credit issuance services, purchase deposit financing and import duty advance services. The Company provides financing services to its customers using its facility lines of credit with its banks. The Company earns a service fee for drawing its facility lines related to customers’ purchases of automobiles and payment of import taxes. The customers bear all the interest and fees charged by the banks and prepay such amounts upon the execution of their service contracts with the Company. The customers are also required to make a deposit in the range of 10% to 15% of the purchase price of the automobile with the Company.

Automobile Value Added Services

The Company’s customs clearance service allows it to complete all vehicle import-related procedures in three to five days. Once vehicles are cleared through customs, the Company offers a value-added delivery service to inland China (by air, by sea or by truck).

Web-based Advertising Services

The Company’s www.at188.com Website provides subscribers, sales and trading information about imported automobiles. In addition to imported automobile sales and trading and new model information, www.at188.com also provides parts and components information. www.at188.com has linked automobile wholesalers and retailers in China and also cooperates with media outlets, such as newspapers, and television and radio stations in cities in China. Its www.at160.com Website is a platform that connects manufacturers, regional distributors and end users of domestically manufactured cars, providing them with a compelling source of information about domestic vehicles and serving as a timelier alternative to traditional magazines and television. The Company’s www.at160.com Website provides real-time price comparison and sales and trading information in the China markets with respect to domestically manufactured automobiles.

Airport Auto Mall Automotive Services

Airport Auto Mall Automotive Services include the rental of the Airport International Auto Mall; and equity income derived from Car King Tianjin. Rental income from the Airport International Auto Mall is recognized based on the monthly rent agreed upon with its tenants.